Echelon Partners with Tsinghua Tongfang to Deliver Building Automation Solutions in ChinaChina’s Leading IT Integration Company Chooses Echelon’s Technology for Rapidly Growing Building Automation Industry(SAN JOSE, CA & BEIJING, CHINA– August 17, 2005) - Echelon Corporation (NASDAQ: ELON), a pioneer in control networking, and the world's leading supplier of technology for the widely-used LonWorks® control networking platform, and Tsinghua Tongfang Co. Ltd., China's largest supplier of building automation solutions and network integration, today announced that the companies have signed a Memorandum of Understanding (MOU) aimed at delivering Tsinghua Tongfang branded building automation products and solutions in China based upon Echelon's market leading technology. Tsinghua Tongfang is one of China's leading information technology (IT) companies engaging in personal computer manufacturing, IT system integration, air conditioning and building automation products manufacturing and systems integration. The agreement was signed earlier this month in Beijing at a ceremony held at Tsinghua Tongfang's headquarters. "We see IT and traditional building management systems (BMS) converging to better meet the needs of the sophisticated and rapidly growing commercial building industry. In China, modernization is occurring at a brisk pace, and many new office buildings, hospitals, hotels and factories are being developed," said Ji Sheng Li, vice president and general manager, IT group, Tsinghua Tongfang. "By standardizing our products and solutions on Echelon's proven, open, and standards-based technology, we will be able to offer customers competitively priced, state-of-the-art building automation systems that provide remote monitoring, control, energy management, and conservation tools, while expanding our market share and creating new business opportunities through the integration of enterprise applications and building control systems." Tsinghua Tongfang has joined Echelon's Open Systems Alliance (OSA) at the highest level available, Master Logo Licensee. The OSA program brings together manufacturers, integrators and resellers to promote open systems based on Echelon's LonWorks platform. Tsinghua Tongfang plans to establish a training / certification center in China and as a Master Logo Licensee they will be able to certify members of their own channel as network integrators under the OSA banner. Echelon and Tsinghua Tongfang will work together in various marketing activities to promote the alliance and the new line of products and solutions based on Echelon's technology. Additionally, Tsinghua Tongfang will develop its own branded line of BMS solutions, making them one of the only fully integrated enterprise automation companies in China offering hardware, software, building systems solutions and enterprise IT integration under one brand. Under the terms of the MOU, products developed by Tsinghua Tongfang will incorporate Echelon's technology. Tsinghua Tongfang will also resell Echelon's existing line of control networking infrastructure products as part of their BMS solutions. Both lines of products will be sold under Tsinghua Tongfang's brand name through an existing system integration sales channel comprised of over 50 companies throughout China. All new products developed by Tsinghua Tongfang will be certified as "interoperable" by LonMark® International, ensuring that these products will integrate with other LonMark certified products from vendors worldwide. "China has an opportunity to leap-frog several generations of building automation technology by moving straight to open control networks – skipping the incremental steps made in foreign markets and utilizing only the best technology available today. Doing so will make China not only the world's largest market for building automation technology, but also the most advanced," said Anders Axelsson, Echelon's senior vice president of sales and marketing. "We are very pleased to be collaborating with Tsinghua Tongfang, combining their number one brand position with our marketing-leading automation technology to make this vision a reality." About Tsinghua Tongfang Co. Ltd. The information technology division of Tsinghua Tongfang is dedicated to the conception and development of new technology in the fields of computer systems, and digital television and media. Tsinghua Tongfang is in a national leader in computer products, digital television, e-education and information products for major industries. The energy and environmental engineering division of Tsinghua Tongfang is focused on garbage incineration, water management, construction and flue gas desulphurization. Specializing in projects related to the use of energy and water resources, controlling environmental pollution and creating artificial environments, Tsinghua Tongfang's large-and-medium-size air conditioning systems hold a dominant position in the Chinese market. Further information regarding Tsinghua Tongfang can be found at http://www.thtf.com.cn/www/web/index.aspx. About Echelon Corporation Echelon is also the creator of the LonWorks platform, an extremely robust, flexible, and expandable standards-based control networking platform upon which manufacturers can build products and applications with unparalleled reliability, security, operational integrity, flexibility, and bottom-line value. The worldwide adoption of the platform prompted the formation of LonMark® International, an independent trade organization that certifies LonWorks based products against an interoperability specification that allows devices from differing manufacturers to work together; educates the market about the value of device interoperability and open control networks; and creates awareness programs for potential end-users, OEM manufacturers, and integrators of LonMark certified products and LonMark systems. For planners, system architects, or OEM designers of control network products and families there is no better choice than Echelon. Echelon is a co-organizer of the LonWorld® 2005 Exhibition and Conference in Paris, France on October 20-21, 2005. Information about the LonWorld event may be found at http://www.lonworldexpo.com. Echelon is based in San Jose, California, with international offices in China, France, Germany, Italy, Hong Kong, Japan, Korea, The Netherlands, and the United Kingdom. Further information regarding Echelon can be found at http://www.echelon.com. ### Echelon, LonWorks, LonMark, LonWorld, and the Echelon logo are registered trademarks of Echelon Corporation registered in the United States and other countries. Other product or service names mentioned herein are the trademarks of their respective owners. This press release may contain statements relating to future plans, events or performance. Such statements may involve risks and uncertainties, including risks associated with uncertainties pertaining to the demand for Echelon products and services for use in building automation, energy management and other markets in China and elsewhere, the overall size of the revenue opportunity in these markets and Echelon's potential participation therein, the timing and level of orders, if any, by Tsinghua Tongfang and other customers; risks that LonWorks based products made by suppliers other than Echelon will be used in building automation applications in China and elsewhere; risks associated the ability of Echelon's products to perform as designed; and other risks identified in Echelon's SEC filings. Actual results, events and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Echelon undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Contact Information
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